Bewildering advances of Japanese production into many fields of European industry are a cause of grave concern in the EC. Calls for protection are growing louder as a mixture of fear and impatience spreads throughout the Community. Wilhelm Haferkamp, EC Commissioner in charge of external trade...

This study explores a new modelling approach that bridges the gap between multilateral country-level data and the bilateral-model based, goods-market specific purchasing power parity (PPP) hypothesis. Under this approach, PPP is embedded in latent common factors, extractable from a large set of...